New funding efforts sputter

Critics question McDonnell’s transportation priorities

Virginians seeking a new, long-term source of money for the state’s overstressed transportation network got little help from this year’s General Assembly. And the road ahead doesn’t look much better.

Dragging into this summer is a fight over how to pay for an extension of the Metrorail system to Washington Dulles International Airport in Northern Virginia. Meanwhile, the Hampton Roads region has no consensus on paying for improvements to its bridges and tunnels. And a big problem is looming about five years from now, when current state funding for transportation will cover only highway maintenance and nothing else.

For many, the lack of progress is discouraging. “I think we clearly and without much argument want to see new revenue for transportation,” says Dana Dickens, president and CEO of the Hampton Roads Partnership, a nonprofit organization promoting regional competitiveness. “There’s a lot of places that new revenue can come from; it’s just going to take some folks [changing their minds] to get there.”

What he means is action at the state level by Gov. Bob McDonnell and the General Assembly. But this year saw little agreement on additional transportation funding. Legislative efforts to raise the state’s 17.5-cents-per-gallon gas tax failed, as did a proposal to increase the gas tax at the rate of inflation. The Republican governor’s plan to shift a relatively small amount of general fund revenue away from education and public safety was rejected by the Senate, which is evenly split between Democrats and Republicans.

So what’s left is worry over what’s coming. Dickens cites problems with the rising tolls for Hampton Roads bridges and tunnels. New tolls were to start this year for the Midtown and Downtown tunnels, as part of the plan to pay for a new parallel Midtown tube and improvements to the tunnels, as well as an extension of the Martin Luther King Freeway. That $2.1 billion project is a public-private deal with Elizabeth River Crossings LLC.

Protest against paying tolls, especially for a project that hadn’t yet been built, was loud. In April, the Commonwealth Transportation Board agreed to provide $100 million to delay collection of tolls on the project until January 2014. The tolls then will be $1.84 per car during rush hour. But the state money just buys a year’s delay, and doesn’t eliminate the chance that tolls could eventually smother the region’s economy. “We have so much water to cross, and it’s so expensive to cross that water, if there’s not some change in the revenue stream on the state level that will somehow buy down some of these tolls, we’re going to very quickly put ourselves in a noncompetitive position,” Dickens says.

Last year’s General Assembly approved McDonnell’s plan to borrow about $3 billion for transportation spending over three years, a major cash infusion. But there’s disagreement there, too, about whether the money is well spent.

Stewart Schwartz, director of the Washington, D.C.-based Coalition for Smarter Growth, argues that the urban regions of Northern Virginia and Hampton Roads are facing higher local taxes and tolls to pay for transportation projects while the state’s borrowed money goes toward projects like the new U.S. 460 corridor. It will create a 55-mile toll road running parallel to the existing 460, from Interstate 295 in Prince George County to U.S. 58 in Suffolk. The project, a public-private arrangement, is getting $500 million in state funds and another $250 million from the Virginia Port Authority.

Schwartz argues that the state’s money would be better spent upgrading the existing Route 460 and improving congested areas in Hampton Roads. “So many people cannot understand why 460 is receiving so much attention from the governor,” he says. “We should be setting better priorities, and we should be more focused on the two economic engines of the state and dealing with the most congested areas of the state.”

That complaint includes the state’s contribution to the Dulles rail extension, a project with an estimated cost of $2.7 billion. Supporters of the project sought an additional $300 million in state funding in this year’s General Assembly session but failed. The project’s budget calls for federal and state funding, as well as contributions from Fairfax and Loudoun counties. And, it will depend heavily on revenue from the Dulles Toll Road. Schwartz again thinks the state should spend some of $3 billion approved last year on the rail project. “Once that money is gone, it’s gone,” Schwartz says. “We actually think the secretary is squandering those resources on the wrong projects.”

Bob Chase of the Northern Virginia Transportation Alliance, an advocacy group that leans strongly in favor of road projects over transit, says the pressure is on McDonnell to do more to produce transportation funding. “He may be the only governor in the foreseeable future capable of forging a bipartisan coalition behind a package restoring fiscal stability to Virginia’s transportation program,” he says.

The group supports proposals such as raising the gasoline tax by a dime and indexing future increases to inflation, and making a small increase in the sales tax. No more piece-meal solutions, Chase says. “Better transportation isn’t free,” he says. “It’s a core government responsibility that can only be fulfilled if all Virginians pay a fair share.”

It might be wishful thinking to hope that the General Assembly members — especially in a House of Delegates dominated by conservative Republicans — would support significant tax increases. Plus, McDonnell favors funding strategies that lean on public-private agreements and tolls. In a May interview with The Associated Press, the governor said that indexing the gas tax to inflation was an idea to consider, but that was as far as he went in discussing raising tax revenues. Taylor Thornley, the governor’s deputy director of communications, says McDonnell “was not endorsing any specific course of action or policy. He was commenting broadly on the widely recognized need to reform our tax system to make it fit the Virginia economy of the 21st century, in a revenue-neutral, or better, manner,” she says. “At this point this is simply a conversation; it is not a set of proposals.”

But supporters of finding a substantial increase in transportation funding won’t quit pressing. “There’s been a lot of people trying to make the case for new revenue for a while now, and I think the public is getting it,” Dickens says. “But the public is not going to tell the governor or the General Assembly, ‘Tax me.’ But I think it will accept new taxes if the need is clearly defined. I think the governor truly wants a solution, and I am optimistic that we’ll have one.”